Historically scrutiny originally fueled because Israel is seen as a supporter of the apartheid system even after all other western countries had withdrawn support https://www.haaretz.com/opinion/.premium-why-israel-supporte...
An outcome like the above is of course clearly completely unacceptble, locally and in the west.
However Israel cannot allow even those territories to become independant because that would require giving up security control, control over valuable land and other natural resources like water. No nation gives away its territory easily!
So current status quo with the territories must be maintained!
There is no irony in celebrating the life of a man who universally condemned oppression and called for a peaceful resolution to one of the most complex conflicts of modern times.